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Globalizing Inequality: ‘Centrifugal’ and ‘Centripetal’ Forces at Work

  • José Gabriel Palma

This paper reassesses national income inequalities in this era of globalization. The main conclusion is that two opposite forces are at work: one ‘centrifugal’ at the two extremes of the distribution—increasing the disparity of income shares appropriated by the top and by the bottom four deciles across countries; and the other ‘centripetal’ in the middle—increasing the uniformity of the share of income going to deciles 5 to 9. Therefore, globalization is creating a situation where virtually all the intercountry diversity of income distribution is the result of differences in what the rich and the poor get in each country.

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Paper provided by United Nations, Department of Economics and Social Affairs in its series Working Papers with number 35.

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Length: 26 pages
Date of creation: Sep 2006
Date of revision:
Handle: RePEc:une:wpaper:35
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  1. Klaus Deininger & Lyn Squire, 1996. "A New Data Set Measuring Income Inequality," CEMA Working Papers 512, China Economics and Management Academy, Central University of Finance and Economics.
  2. Aghion, Philippe & Caroli, Eve & García-Peñalosa, Cecilia, 1999. "Inequality and Economic Growth: The Perspective of the New Growth Theories," Scholarly Articles 12502063, Harvard University Department of Economics.
  3. Jonathan Michie (ed.), 2003. "The Handbook of Globalisation," Books, Edward Elgar, number 2964, April.
  4. Hongyi Li & Lyn Squire & Tao Zhang & Heng-fu Zou, 1999. "A Data Set on Income Distribution," CEMA Working Papers 575, China Economics and Management Academy, Central University of Finance and Economics.
  5. Atkinson, A B, 1997. "Bringing Income Distribution in from the Cold," Economic Journal, Royal Economic Society, vol. 107(441), pages 297-321, March.
  6. Paul Krugman & Robert Lawrence, 1993. "Trade, Jobs, and Wages," NBER Working Papers 4478, National Bureau of Economic Research, Inc.
  7. Haskel, Jonathan, 2000. "The Trade and Labour Approaches to Wage Inequality," CEPR Discussion Papers 2476, C.E.P.R. Discussion Papers.
  8. José Gabriel Palma, 2005. "The seven main "stylized facts" of the Mexican economy since trade liberalization and NAFTA," Industrial and Corporate Change, Oxford University Press, vol. 14(6), pages 941-991, December.
  9. William R. Cline, 1997. "Trade and Income Distribution," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 58.
  10. Wolfson, Michael C, 1994. "When Inequalities Diverge," American Economic Review, American Economic Association, vol. 84(2), pages 353-58, May.
  11. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-42, June.
  12. Deepak Lal, 1993. "Poverty and Development," UCLA Economics Working Papers 707, UCLA Department of Economics.
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